While there are still some areas of concern in the farm economic sector, the Federal Reserves Nathan Kauffman says the outlook is much better now compared to six months ago. But, will this recent momentum continue going in to 2021?
Kauffman said there are a variety of reasons to ben encouraged when looking at commodity prices compared to input costs.
“Cash flow going in to 2021 as we go through loan renewal season there are likely to still be some challenging conversations about profitability and what that looks like in 2021.”
Commodity prices will also factor in to outlooks regarding exports and potential government supports and payments available to producers in 2021.
“Depending on the path of commodity prices the outlook for some of those government payments will be important in terms of determining the viability of a number of ag operations in 2021.”
As Kauffman added, economic challenges that faced the economic sector pre-pandemic and over the past few years could still factor in to next year.
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